Correlation Between Biglari Holdings and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Biglari Holdings and Coca Cola at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Biglari Holdings and Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biglari Holdings and The Coca Cola, you can compare the effects of market volatilities on Biglari Holdings and Coca Cola and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Biglari Holdings with a short position of Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and Coca Cola.
Diversification Opportunities for Biglari Holdings and Coca Cola
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Biglari and Coca is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola and Biglari Holdings is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Biglari Holdings are associated (or correlated) with Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and Coca Cola go up and down completely randomly.
Pair Corralation between Biglari Holdings and Coca Cola
Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 2.98 times more return on investment than Coca Cola. However, Biglari Holdings is 2.98 times more volatile than The Coca Cola. It trades about 0.07 of its potential returns per unit of risk. The Coca Cola is currently generating about 0.06 per unit of risk. If you would invest 15,467 in Biglari Holdings on August 28, 2024 and sell it today you would earn a total of 5,231 from holding Biglari Holdings or generate 33.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biglari Holdings vs. The Coca Cola
Performance |
| Timeline |
| Biglari Holdings |
| Coca Cola |
Biglari Holdings and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biglari Holdings and Coca Cola
The main advantage of trading using opposite Biglari Holdings and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings position performs unexpectedly, Coca Cola can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Coca Cola will offset losses from the drop in Coca Cola's long position.| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
| Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Celsius Holdings | Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Keurig Dr Pepper |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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